Did “bankers” get bailed out by the government in 2008? Yes, they certainly did. They were, on the surface, the biggest direct beneficiaries, but I completely and wholeheartedly challenge the notion that they were the only beneficiaries, nor the entire cause of the financial crises that began in 2008. I read article after article about “poor savers” suffering from low interest rates and how difficult it is for pension plans to meet their (rate of) return targets, jeopardizing pensioners. Certainly, for the people impacted, it can be devastating, and no one is questioning that. It is very understandable to get angry when you feel, somehow, that “the system” has let you down.
The reality is, though, that “banks” cannot be bailed out, only people can be bailed out. Yes, most likely, you were bailed out. Stock and bond owners, beneficiaries of 401(k) and pension plan accounts, bank customers (deposit holders), the Federal Deposit Insurance Corporation (FDIC) and, ultimately, taxpayers were all bailed out, not “banks”. Had massive government measures not been taken, depositors would have lost money and stocks, bonds and real estate would have all crashed, and not come back. So, for now, everyone that has been bailed out should be very thankful.
While 0% interest on your savings isn’t anything to write home about, losing 50% of your savings during the financial crises, I think you will agree, would have been much worse. And, yes, many pensions are in jeopardy. There have been promises made (with other people’s money) that simply cannot be kept. Be glad that you have a pension, the vast majority of the population has no pension at all. And, yes, your stock and bond portfolios have recovered. Now may be a good time to protect what you have, instead of complaining that you used to get a much higher rate of return. No one has any right or guarantee to any rate of return, let alone in publicly traded equity and bond markets.
I am not suggesting that you thank government for your good fortune. Take this time to assess your risks and take appropriate actions. The bail-out measures taken since 2008 have been equivalent to cleaning up overflow from a clogged toilet on the deck of the Titanic. More trouble will certainly follow, and there is no guarantee that you will be so lucky the next time.
So, to summarize:
Do you pay taxes? You got bailed out.
Do you own stocks or bonds? You got bailed out.
Do you own mutual funds? You got bailed out.
Do you have a 401(k)? You got bailed out.
Do you…well you get the idea…
So, will the real bail-out recipients please stand?